When is Apparently “Good Conduct” Unlawful?

April 22, 2014

According to the United States’ National Labor Relations Board (NLRB) – it depends. On April 1, 2014, the NLRB ruled on the appeal of (and made even murkier),[1] an initial decision before a single Administrative Law Judge (ALJ) of February 17, 2012,[2] in which the answer to that question was first and thoroughly muddied.

INSTRUCTIONS: Hills and Dales General Hospital of Cass City, Michigan (hereinafter “the hospital”), had as do most employers, an interest in maintaining the discipline and well-being of its employees; in protecting and improving the goodwill and community reputation of its business; the continuation of its business operations as a going concern; and its full and good faith compliance with applicable law. Hence, it structured and issued a `Good Conduct` policy for its staff that provided, in relevant part:[3]

With regard to Teamwork –

11. We will not make negative comments about our fellow team members and we will take every opportunity to speak well of each other.

16. We will represent Hills & Dales in the community in a positive and professional manner in every opportunity.

With regard to Attitude –

21. We will not engage in or listen to negativity or gossip. We will recognize that listening without acting to stop it is the same as participating.

Oddly enough, it was to remedy what the hospital itself, had described as “a poor work environment” riddled with “back-biting and back stabbing” as far back as 2005, that the company instituted its new Values and Standards of Behaviour Policy (hereinafter “the Policy”).[4] The policy, once implemented after several rounds of employee reviews and edits, was: (i) voluntarily signed by some of the hospital`s employees then framed in public posters within the workplace; (ii) included in the hospital`s human resources policy manual, with employee acknowledgements of the receipt of same signed, and placed in their personnel files; and (iii) used as a basis for employee discipline by the hospital on at least one occasion.[5]

NUANCES: In failing to give specific definitions or examples of what constituted “negative”, or “positive and professional” conduct,[6] the hospital was charged with a violation of Section 7 of the National Labor Relations Act (NLRA) for knowingly maintaining such a vague and overbroad Policy of employee conduct.

RIGHTS OF EMPLOYEES –

Sec. 7. [§ 157.] Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3) [section 158(a)(3) of this title].[7] (emphasis added).

The specific unfair labor practice alleged as in, and impacting interstate commerce, was described under Section 8(a)(1):

UNFAIR LABOR PRACTICES –

Sec. 8. [§ 158.] (a) [Unfair labor practices by employer] It shall be an unfair labor practice for an employer–

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 [section 157 of this title];

FINDINGS BELOW: ALJ Carter upheld the bulk of the allegations that the statements or conduct of the hospital did indeed have a reasonable tendency to interfere with, restrain or coerce union or protected activities as interpreted by a reasonable employee,[8] in light of relevant tests for the application of Section 7 of the NLRA.[9] As the ALJ ruled: “paragraph 11 implicitly includes protected activities because it prohibits negative comments about managers”,[10] “paragraph 16’s call for employees to represent the hospital in a positive and professional manner is a lawful call for employees to maintain a high standard of professionalism with potential (or actual) customers at every opportunity”,[11] and “the Hospital’s (paragraph 21) prohibition of ’negativity’ is so patently ambiguous, imprecise and overbroad that a reasonable employee would construe it as prohibiting protected discussions about working conditions and the terms and conditions of employment”.[12]

Hence, ALJ Carter decided and Ordered that the hospital act within 14 days to revise or rescind paragraphs 11 and 21 of its Values and Standards of Behaviour Policy (but he dismissed the allegation with regard to paragraph 16 of that same Policy); with a further Order for workplace posting and electronic delivery to hospital employees, of an Appendix undertaking that was structured and worded on the substance of his decision and Order.[13]

That first decision by ALJ Carter was then appealed to the NLRB, with the parties filing exceptions, cross-exceptions and supporting briefs, answering briefs, and reply briefs, and the matter was subsequently heard and recently decided by a panel of three Members of the same National Labor Relations Board.

RULING ON APPEAL: The NLRB panel adopted ALJ Carter`s findings and decision with regard to paragraphs 11 and 21 of the Policy, but reversed them with regard to paragraph 16 in a 2:1 ruling – concluding that the language therein did indeed constitute an additional violation of the NLRA, after all.[14]

“The requirement that employees “represent [the Respondent] in the community in a positive and professional manner” is just as overbroad and ambiguous as the proscription of “negative comments” and “negativity” in paragraphs 11 and 21. (…) This would, for example, discourage employees from engaging in protected public protests of unfair labor practices, or from making statements to third parties protesting their terms and conditions of employment—activity that may not be “positive” towards the Respondent but is clearly protected by Section 7.”[15]

Accordingly, the panel issued a revised decision and Order of April 1, 2014, that included an additional requirement (again to be acted upon within 14 days thence), that the hospital also revise or rescind paragraph 16 of its Values and Standards of Behaviour Policy, along with paragraphs 11 and 21 as earlier ordered by ALJ Carter in his 2012 decision and Order.[16]

AFTER-EFFECTS: This decision on appeal, shows that any attempt by employers to impose (or suggest or recommend) a certain standard of conduct should be very narrowly-tailored, otherwise it may well run afoul of the National Labor Relations Act, the NLRB policy, and applicable caselaw. Although it would be highly advisable to delineate examples of what would (or might) be considered impermissible conduct under the employer standard, the potential for a catch 22 remains – (a) over-inclusiveness may lead to serious enforceability issues and credible challenges of overbreadth; whilst (b) under-inclusion due to at times glaring omissions, may leave some otherwise objectionable conduct non-sanctionable, for claimed lack of notice that it was a “no-go area” on the part of an aggrieved current or former employee.

In short, employers should tread very carefully, seek legal counsel, and not necessarily assume, as did the hospital, apparently, that a standard of conduct template already in use elsewhere with no apparent issues, is a good one to follow; or that employee input and consultation in the creation of the standard – even if that participation is significant and sustained in the process, will somehow prevent or preclude the standard as finally made, from clearly or potentially infringing upon or prohibiting outright, some protected activity under the NLRA, or being otherwise objectionable in the eyes of an ALJ on the decision below (as with paragraphs 11 and 21 of the Policy), of an NLRB panel on appeal (as with paragraph 16 of the Policy), or perhaps both.

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Author:

Ekundayo George is a sociologist and a lawyer. He has also taken courses in organizational and micro-organizational behavior, and has significant experienced in business law and counseling (incorporations, business plans, contracts and non-disclosure agreements, teaming and joint venture agreements), diverse litigation, and regulatory compliance practice. He is licensed to practice law in Ontario, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America (U.S. business advising, outsourcing and cross-border trade, technology contracts, and U.S. financing). See, for example: http://www.ogalaws.com. A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, eCommerce, Outsourcing, Cloud), Financial Services, Healthcare, Entertainment, Real Estate and Zoning, International/cross-border trade, other Services, and Environmental Law and Policy. He is a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and he enjoys complex systems analysis in legal, technological, and societal milieux.

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[8] Hills and Dales General Hospital and Danielle Corlis, Case 07-CA-053556 (Feb. 17, 2012), before Geofffey Carter, ALJ, at 6. “In the Acting General Counsel’s view, those work rules are overbroad because a reasonable employee would conclude that the rules prohibit protected activity such as employee discussions about the terms and conditions of their employment”.

[9] Id. at 5. “If the rule explicitly restricts Section 7 activity, it is unlawful. If the rule does not explicitly restrict Section 7 activity, it is nonetheless unlawful if (1) employees would reasonably construe the language of the rule to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. In applying these principles, the Board refrains from reading particular phrases in isolation, and it does not presume improper interference with employee rights”. NLS Group, 352 NLRB 744, 745 (2008) (citing Lutheran Heritage Village-Livonia, 343 NLRB 646, 646–647 (2004)), adopted in 355 NLRB No. 169 (2010), enfd. 645 F.3d 475 (1st Cir. 2011).